Where Are You, Office Demand?

The full impact of Toronto’s building boom won’t be felt for years to come, according to CBRE. (For those who demand instant satisfaction, send an email to yourself.)

CBRE EVP John O’Toole walked us through some of the highlights of a national 2014 outlook report he co-authored. While many larger office tenants have completed their renewals or relocations, there is uncertainty as to the next sources of office demand. While they don’t know what specific sector will emerge to drive demand, they certainly see demand increasing over the next five years, John says. Office vacancy in the region is expected to rise, to 11.1%, from 9.4% in 2013; in terms of industrial, availability rate is expected to drop to 4.5%, from 4.6% in 2013, but the net rental rate and sale price are expected to rise to $5.24 and $90.24/SF, respectively.

Sherway Gardens GM Andy Traynor and property manager Brian O’Hoski, during a tour of construction on Sherway Gardens. (It only looks like an outdoor mall at the moment.) Over 50% of the total retail space under construction nationwide is in the GTA--we're tops when it comes to desirable locations for foreign and domestic retailers. Space that's available remains a hot commodity. One unexpected development on the investment front: manufacturing growth in Durham, and the inevitable retail and residential expansion that will follow.

RBC Waterpark Place, one of the projects to watch, according to CBRE. With Toronto undergoing the largest build cycle in the downtown since the late 1980s, John says they'll be monitoring development closely over the next year. "There are a variety of different approaches to downtown office development at play," he tells us. Buttonville redevelopment and The West Don Lands are other projects to watch, he says, "because of their size and potential to be transformative for the city."

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